US retail: the party in third-party platforms

Black Friday and Cyber ​​Monday mark the beginning of a holiday dollar battle in the United States. Traditional retailers are pulling pages from Amazon’s playbooks. They are building an online marketplace where third party sellers can offer their products.

Walmart, Target, Staples, Macy’s and Express are one of the hundreds of retailers that have recently published their websites to external vendors. They aim to drive web traffic by increasing the assortment of products available on the company’s website without inventory risk. This can be an advantageous way to drive growth online.

Third-party sellers bear most of the cost by keeping their inventory in their warehouse and delivering the goods to their customers. Host sites usually charge a 5-15% commission to sell. Companies can also sell advertising, shipping services, and even credit lines to merchants.

Everyone wants to emulate the success of Amazon’s third-party marketplace. Launched in 2000, this business is now About 60 percent Of Amazon’s online sales volume.Generated $ 80.5 billion in revenue For Amazon last year. That’s more than one-fifth of the group as a whole, almost twice the amount withdrawn by the AWS cloud business. However, the latter is even more profitable, accounting for 60% of last year’s group operating profit.

Amazon’s third-party business has grown very dominantly and triggered it Antitrust investigation.. In Europe, regulators have accused the world’s largest online retailers of misusing data about third-party sellers. In the United States, the Supreme Legal Officer is investigating whether Amazon discourages retailers from selling products on other websites.

These are not just the risks of opening the door to external vendors. At the top of the list is quality control. Amazon is being increasingly scrutinized for selling counterfeit, unsafe, and even fenced merchandise.

A market with few competitors is the easiest to attract vendors. Still, retailers such as Wal-Mart have a long way to go to catch up with Amazon, which has nearly two million sellers on its platform.

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